SMch22Beams

Chapter 22

ACCOUNTING FOR NOT-FOR_PROFIT ORGANIZATIONS Questions 1

The financial financial statements statements required fr nn!"ern nn!"ernmenta mentall nt-fr-#r nt-fr-#rfit fit entities include include a statement statement f financial #sitin$ a statement f acti"ities$ and a cash fl% statement& 'luntar( health and %elfare r!ani)atins als #r"ide a statement f functinal e*#enses&

2

+ach +ach hs hs#it #ital$ al$ clle! clle!e$ e$ and "lunt "luntar( ar( health health and %elfar %elfaree r!ani r!ani)at )atin in ,and ,and ther ther nt-f nt-fr-# r-#rf rfit it r!ani)atins as %ell must .e e"aluated t determine %hether it meets the definitin f a !"ernment in the authritati"e literature& Thse that meet the definitin f a !"ernment must a##l( the !"ernment GAAP hierarch(& GAS/ standards are the mst authritati"e !uidance fr these entities& All ther entities are t a##l( FAS/ standards&

3

The AICPA !uides .ecame nnauthritati"e nnauthritati"e GAAP in 0112 %ith chan!es at .th FAS/ and GAS/& FAS/ 340 issued in 0115 s#ecified the hierarch( f GAAP fr nn!"ernmental r!ani)atins t .e m"ed frm SAS 42 ,i&e& the auditin! standards standards t FAS/ ,i&e& the accuntin! accuntin! standards& Similarl($ GAS/ 66 issued in 0112 s#ecified the hierarch( f GAAP fr !"ernmental entities t .e m"ed frm SAS 42 t GAS/& Su.sequentl($ FAS/ 345 issued in 0112 7 the last FAS/ 8Statement9 issued 7 created the cdificatin f GAAP GAAP in the Acc Accun untin tin! ! Stand Standar ards ds Cdi Cdifi fica cati tin n as the the sle sle auth authr rita itati" ti"ee sur surce ce f GAAP GAAP fr fr nn!"ernm nn!"ernmental ental r!ani)ati r!ani)atins& ns& FAS/ n% has t% cate!ries$ cate!ries$ the ASC %hich is authritati"e authritati"e and e"er(thin! e"er(thin! else is nn-authr nn-authritati"e itati"e&& GAS/ 66 :ee#s the #rir hierarch( hierarch( %here.( %here.( the AICPA audit and accuntin! !uides are le"el . 7 ;ust .eneath GAS/ Statements and Inter#retatins&

4

A cnditinal #rmise t !i"e de#ends n the ccurrence f a s#ecified future and uncertain e"ent t .ind the #rmisr& An uncnditinal #rmise t !i"e de#ends nl( n the #assa!e f time r demand .( the  #rmisee fr #erfrmance& Or!ani)atins rec!ni)e cnditinal #rmises t !i"e as cntri.utin re"enue and recei"a.les %hen the cnditi cnditins ns are su. su.sta stantia ntiall( ll( met ,in ther ther %rds$ %rds$ %hen %hen the cnditi cnditina nall #rmis #rmisee t !i"e !i"e .ecme .ecmess uncnditinal< h%e"er$ the( accunt fr a cnditinal !ift f cash r ther asset that ma( ha"e t .e return returned ed t the dn dnr r if the cnditi cnditin n is nt met as a refund refunda.l a.lee ad"anc ad"ancee ,lia.i ,lia.ilit( lit(& & Or!ani Or!ani)at )atins ins rec!ni)e uncnditinal #rmises t !i"e as restricted r unrestricted cntri.utin re"enue and recei"a.les in the #erid in %hich the #rmise is recei"ed&

5

A dnr-im#sed cnditin #r"ides that the dnr %ill ha"e his resurces returned ,r %ill .e released frm the #rmise t !i"e if the cnditin is nt met& A dnr-im#sed restrictin nl( limits the #ur#se r timin! f use f the cntri.uted assets&

6

Uncnditinal #rmises t !i"e %ith #a(ments due in the ne*t #erid are re#rted as restricted su##rt ,net f an a##r#riate all%ance fr uncllecti.le accunts that increase tem#raril( restricted net assets$ e"en if the resurces are nt restricted fr s#ecific #ur#ses&

7

=hen a time restrictin is met$ tem#raril( restricted net assets are reclassified as unrestricted net assets& The entr( entr( includ includes es a de.it de.it t tem#r tem#rari aril( l( restr restricte icted d net assets assets>re >recla classi ssific ficati atins ns ut and a credit credit t unrestricte unrestricted d net assets>re assets>reclass classifica ificatins tins in& ,?ifferen ,?ifferentt accunt accunt titles$ titles$ such as amunts amunts released released frm restrictins$ are #ermitted as %ell&

8

Gifts in :ind are re#rted as unrestricted su##rt that increases unrestricted net assets if the nt-fr-#rfit entit( has discretin "er the dis#sitin f the resurces and a fair "alue can .e reasna.l( determined& If fair "alue cannt .e determined$ the items are recrded as sales re"enue %hen the( are sld& If the nt-fr© 2011 Pearson Education, Inc. publishing as Prentice Hall 22-1

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 #rfit entit( has little r n discretin "er dis#sitin f the items$ the !ifts in :ind shuld .e accunted fr as a!enc( transactins& 9

Pr!ram ser"ices f "luntar( health and %elfare r!ani)atins are e*#enses incurred in meetin! the scial ser"ice .;ecti"es f the r!ani)atin& +*am#les are research$ #u.lic educatin$ cmmunit( ser"ices$ and  #atient ser"ices& Su##rtin! ser"ices cnsist f the r!ani)atin@s administrati"e and fund-raisin! csts$ and e*#enses fr these items are s classified in the statement f acti"ities&

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The statement f functinal e*#enses fr "luntar( health and %elfare r!ani)atins is intended t recncile the functinal classificatin f e*#enses ,%hich results in hi!hl( a!!re!ated data %ith .asic .;ect-f-e*#enditure classificatins that are less a!!re!ated and easier fr man( users t understand&

11

Cntri.uted ser"ices are rec!ni)ed nl( if the ser"ices ,a create r enhance nnfinancial assets f the r!ani)atin r ,. require s#eciali)ed s:ills$ are #r"ided .( indi"iduals #ssessin! thse s:ills$ and %uld t(#icall( need t .e #urchased if nt #r"ided .( dnatin&

12

Charit( care is e*cluded frm .th !rss #atient ser"ice re"enue and frm e*#ense& The hs#ital@s #lic( fr #r"idin! charit( care and the le"el f charit( care #r"ided are disclsed in ntes t the financial statements&

13

 Net #atient ser"ice re"enues f hs#itals are measured .( deductin! curtes( all%ances and cntractual ad;ustments frm !rss #atient re"enues& Uncllecti.le accunts e*#enses are nt deducted in cm#utin! net #atient ser"ice re"enues& Net #atient ser"ice re"enues are re#rted in the statement f acti"iti es&

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The three ma;r re"enue !ru#in!s used .( hs#itals are #atient ser"ice re"enues$ ther #eratin! re"enue$ and nn#eratin! !ains& +*am#les are Patient ser"ice re"enues>rutine care$ emer!enc( rm$ rec"er( rm$ #harmac( Other #eratin! re"enues>tuitin frm educatinal #r!rams$ research !rants fr s#ecific #ur#ses$ !ift sh# sales  Nn#eratin! !ains>unrestricted !ifts$ unrestricted end%ment incme$ !ain n sale f #lant assets$ rents frm #r#ert( nt used in hs#ital #eratins ,Premium fees als are si!nificant fr man( hs#itals tda(& The( %uld .e re#rted as a se#arate line item under #eratin! re"enues&

15

/th the #r"isin fr .ad de.ts ,ther than fr charit( care$ %hich is nt recrded as re"enue and de#reciatin are e*#enses f a hs#ital& Bs#itals use full accrual accuntin! #rcedures&

16

FAS/ Statement N& 33 ,n% cdified in FAS/ ASC 265 requires #ri"ate nt-fr-#rfit uni"ersities t  #r"ide a set f financial statements that includes a statement f financial #sitin$ statement f acti"ities$ statement f cash fl%s$ and accm#an(in! ntes& G"ernmental uni"ersities are cnsidered s#ecial #ur#se !"ernments under GAS/ Statements N& DE and D6& S#ecial-#ur#se !"ernments %ith mre than ne !"ernmental #r!ram r .th !"ernmental and .usiness-t(#e acti"ities #resent .th !"ernment-%ide and fund financial statements$ as %ell as the ?A$ ntes$ and required su##lementar( infrmatin& S#ecial-#ur#se !"ernments %ith nl( ne !"ernmental #r!ram ma( cm.ine fund and !"ernment-%ide statements$ %hereas thse %ith nl( .usiness-t(#e acti"ities shuld re#rt nl( the financial statements required fr enter#rise funds$ as %ell as the ?A$ ntes$ and required su##lementar( infrmatin&

17

G"ernment clle!es and uni"ersities n ln!er ha"e the #tin f usin! the AICPA clle!e !uide< h%e"er$ man( r!ani)atins ma( ha"e retained AICPA mdel features fr internal accuntin! and cntrl  #ur#ses&

18

uch !uidance cmes frm the Financial Accuntin! and Re#rtin! anual$ an accuntin! manual  #re#ared .( the Natinal Assciatin f Clle!e and Uni"ersit( /usiness Officers ,NACU/O %hich is a"aila.le as an nline su.scri#tin ser"ice&

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GAS/ Statements N& DE and D6 require s#ecial-#ur#se !"ernment %ith mre than ne !"ernmental  #r!ram r .th !"ernmental and .usiness-t(#e acti"ities t #resent .th !"ernment-%ide and fund financial statements$ as %ell as the ?A$ ntes$ and required su##lementar( infrmatin& S#ecial #ur#se !"ernments %ith nl( ne !"ernmental #r!ram ma( cm.ine fund and !"ernment-%ide statements$ %hereas thse %ith nl( .usiness-t(#e acti"ities shuld re#rt nl( the financial statements required fr enter#rise funds$ as %ell as the ?A$ ntes and required su##lementar( infrmatin&

20

Functinal classificatins include the fll%in!   Instruction. +*#enses fr the educatinal #r!rams •  Resource. +*#enses t #rduce research utcme • Public Service. +*#enses fr acti"ities t #r"ide nninstructinal ser"ices t e*ternal !ru#s • Acae!ic su""ort. +*#enses t #r"ide su##rt fr instructin$ research$ and #u.licatins •  Stuent Services. Amunts e*#ended fr admissins and re!istrar$ and amunts e*#ended fr students@ emtinal$ scial$ and #h(sical %ell-.ein! • Institutional su""ort. Amunts e*#ended fr administratin and the ln!-ran!e #lannin! f the uni"ersit( • #"eration an !aintenance o$ "lant. +*#enses fr #eratin! and maintainin! the #h(sical #lant ,net f amunts t au*iliar( enter#rises and uni"ersit( hs#itals • Stuent ai. +*#enses frm restricted r unrestricted funds in the frm f !rants$ schlarshi#s$ r fell%shi#s t students& •

21

Pr#ert($ #lant$ and equi#ment acquired .( a nt-fr-#rfit r!ani)atin %ith unrestricted r restricted resurces ma( .e recrded at acquisitin as unrestricted r tem#raril( restricted& If tem#raril( restricted$ the assets are reclassified %hen de#reciatin is rec!ni)ed&

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%&%R'IS%S %22(1 d 1 a 2 d 3 c 4  . 5

%22(2  . 1 a 2 d 3  . 4 c 5

%22(3  . 1  . 2 c 3 d 4 a 5

%22(4 a 1  . 2 a 3 a 4 c 5

%22(5  . 1  . 2 c 3 c 4 d 5

%22(6  . 1 a 2 a 3 c 4  . 5

%22(7  . 1 a 2 c 3 a 4 d 5 %22(8

Pr!ram ser"ices +ducatin Pu.lic Bealth Research

H01$E11 36$11 30$111

HE5$311

Su##rtin! ser"ices Fund raisin! ana!ement and !eneral

H33$E11 6$611

H34$211

%22(9 1) Cntri.utins recei"a.le All%ance fr uncllecti.le cntri.utins Unrestricted su##rt > cntri.utins Restricted su##rt > cntri.utins T recrd cntri.utin re"enues and an all%ance fr uncllecti.le accunts&

01$111 411 3D$651 6$501

Cntri.utins that are nt due until the ne*t #erid im#l( a time restrictin unless the dnr e*#licitl( sti#ulates that the #led!e is fr current e*#enditures& Thus$ unrestricted net assets are increased .( H3D$651 and tem#raril( restricted net assets are increased .( H6$501& 2) Cash

011

Restricted su##rt > cntri.utins T recrd a !ift restricted t a s#ecial #r;ect& ,Recall that sme NFPs ma( recrd as unrestricted if the restrictin is met in the same #erid& +*#enses > cmmunit( ser"ice #r!ram ser"icesJ Cash T recrd e*#enditures fr restricted #ur#se&

011

011

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011

22-5

Tem#raril( restricted net assets > reclassificatins ut  Unrestricted net assets > reclassificatins in T recrd satisfactin f tem#rar( restrictin& 3) +qui#ment

011 011

4$111

Unrestricted su##rt > Cntri.utins T recrd recei#t f dnated equi#ment& ?e#reciatin e*#ense > cmmunit( ser"ices Accumulated de#reciatin > equi#ment T recrd de#reciatin e*#ense fr the (ear n unrestricted ln!-li"ed assets&

4$111

3$611 3$611

The r!ani)atin ma( als ad#t an accuntin! #lic( that im#lies a time restrictin that e*#ires "er the useful life f the dnated asset& If the !ift is re#rted as restricted su##rt in tem#raril( restricted net assets$ de#reciatin is recrded as an e*#ense in unrestricted net assets$ %hich results in a reclassificatin fr the amunt f the de#reciatin frm tem#raril( restricted t unrestricted net assets& 4) Cash

5$111

Restricted su##rt > cntri.utins T recrd recei#t f dnatin restricted t the #urchase f a truc:& Accrued interest recei"a.le Restricted re"enue > in"estment incme T recrd accrual f interest n funds restricted fr the #urchase f a truc:&

5$111

036 036

The cntri.utin f cash restricted fr ln!-li"ed asset #urchases increased tem#raril( restricted net assets$ as did the dnr-restricted in"estment incme n thse funds& 5) Accunts recei"a.le Unrestricted re"enues > tuitin and fees T recrd tuitin and fees&

Tuitin reductin unrestricted>student aid Accunts recei"a.le T recrd tuitin reductins& +*#enses>educatinal and !eneral>institutinal su##rt All%ance fr uncllecti.le accunts T recrd all%ance fr uncllecti.le accunts& 6) Cash

D6$111 D6$111

46$111 46$111

$D61 $D61

D$111$111

Tem#raril( restricted cntri.utin > t.acc research T recrd recei#t f restricted !rant&

D$111$111

+*#enses > t.acc research Cash T recrd e*#enses fr t.acc research&

3$011$111

Tem#raril( restricted cntri.utin > t.acc research Cntri.utin ,unrestricted T reclassif( the cntri.utin as unrestricted&

3$011$111

3$011$111

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3$011$111

22-

PR#*+%,S P22(1

Voluntary Health and Welfare Organization gift  a Cash 1 Unrestricted su##rt>cntri.utins T recrd cash cntri.utin recei"ed&

 .

+*#enses ,.( functin Cash T recrd #eratin! e*#enses #aid&

 Private University Gift  a Cash 2

6$111$111 6$111$111

0$D11$111 0$D11$111

6$111$111 Restricted su##rt>cntri.utins > research T recrd restricted cash !ift recei"ed&

 .

6$111$111

+*#enses>research Cash T recrd research e*#enses&

0$D11$111

Tem#raril( restricted net assets> reclassificatins ut Unrestricted net assets > reclassificatins in T recrd release f assets frm tem#rar( restrictins&

0$D11$111

 Local Hospital Gift  a Cash 3

0$D11$111

0$D11$111

6$111$111 Restricted su##rt > cntri.utins T recrd cash !ift restricted fr ca#ital additi ns&

 .

6$111$111

Cnstructin in #r!ress Cash T recrd cnstructin csts incurred&

0$D11$111

Tem#raril( restricted net assets > reclassificatins ut Unrestricted net assets > reclassificatins in T recrd release f assets frm tem#rar( restrictins&

0$D11$111

0$D11$111

0$D11$111

P22(2

 Payment of salaries +*#enses > mana!ement and !eneral 0$201 +*#enses > cmmunit( ser"ice 33$451 Cash T recrd #a(ment f salaries allcated 01K t  mana!ement and !eneral ser"ices and 51K t  #r!ram ser"ices&  onated services +*#enses > mana!ement and !eneral Unrestricted su##rt > dnated ser"ices

3E$411

211

© 2011 Pearson Education, Inc. publishing as Prentice Hall

211

22-!

T recrd dnated ser"ices&  onated facilities +*#enses > mana!ement and !eneral 411 +*#enses > cmmunit( ser"ice 0$E11 Unrestricted su##rt > dnated facilities T recrd allcatin f dnated faciliti es 01K t mana!ement and !eneral and 51K t #r!ram ser"ices&  Payment of utilities +*#enses > mana!ement and !eneral D41 +*#enses > cmmunit( ser"ice 3$EE1 Cash T recrd #a(ment f utilities allcated 01K t mana!ement and !eneral and 51K t #r!ram ser"ices&  Purchase and use of supplies Su##lies in"entr( Cash T recrd #urchase f su##lies&

D$111

3$511

D11 D11

+*#enses > mana!ement and !eneral 41 +*#enses > cmmunit( ser"ice 0E1 Su##lies in"entr( T recrd allcatin f su##lies e*#ense 01K t mana!ement and !eneral and 51K t #r!ram ser"ices&  !dministration and other e"penses +*#enses > mana!ement and !eneral 3$011 +*#enses > cmmunit( ser"ice E$511 Cash T recrd #a(ment f recrd:ee#in! e*#enses allcated 01K t mana!ement and !eneral and 51K t #r!ram ser"ices&

D11

4$111

Gifts in #ind  are re#rted as cntri.utins since Share Sh# has di scretin "er their distri.utin and a fair "alue is determina.le& =hen !ifts in :ind are distri.uted t reci#ients$ the( are recrded as #r!ram e*#enses& If fair "alue cannt .e determined$ neither the cntri.utin nr distri.utin %uld .e recrded&

In"entr( > nn#erisha.le fd In"entr( > husehld items Unrestricted su##rt > dnated assets T recrd recei#t f dnated fd and husehld it ems&

41$111 E1$111

+*#enses > cmmunit( ser"ice In"entr( > nn#erisha.le fd In"entr( > husehld items T recrd distri.utin f fd and husehld items t qualified reci#ients&

46$111

Cash contri$utions Cash Unrestricted su##rt > cntri.utins T recrd recei#t f cash cntri.utins&

311$111

E6$111 01$111

31$111

© 2011 Pearson Education, Inc. publishing as Prentice Hall

31$111

22-"

Unconditional promises to give ,slutin assumes all #led!es %ere due in 0133 Pled!es recei"a.le Unrestricted su##rt > cntri.utins All%ance fr uncllecti.le #led!es T recrd #led!es recei"ed and 31K estimated uncllecti.le #led!es&

01$111 35$111 0$111

Cash 36$111 Unrestricted su##rt > cntri.utins D$111 All%ance fr uncllecti.le #led!es 3$111 Cntri.utins recei"a.le Tem#raril( restricted su##rt > cntri.utins T recrd recei#t f cash$ ad;ust the all%ance accunt fr the "erstatement f uncllected  #led!es$ and reclassif( uncllected su##rt& Grant  Grant recei"a.le

36$111 E$111

06$111

Tem#raril( restricted su##rt > !rant T accrue !rant frm T%n f Nrth Ptarmi!an due in 0130&

© 2011 Pearson Education, Inc. publishing as Prentice Hall

06$111

22-#

P22(3 -o!eton ,e!orial -os"ital Statement f O#eratins Fr the (ear ended ?ecem.er D3$ 0133

Unrestricted revenues% gains% and other support&  Net #atient ser"ice re"enues ,H0$611$111 - HE11$111 - H311$111 Other #eratin! re"enues ,HD11$111 L H61$111 Incme frm in"estment in affiliate In"estment incme Unrestricted cntri.utins  Net assets released frm restrictins fr #eratin! #ur#ses Ttal #eratin! re"enues$ !ains$ and net assets released frm restrictins fr #eratins  '"penses and Losses&  Nursin! ser"ices Other #rfessinal ser"ices General ser"ices Administrati"e ser"ices Uncllecti.le accunts Mss n sale f fi*ed assets ?e#reciatin Ttal e*#enses and lsses

+*cess f re"enues$ !ains$ and ther su##rt "er e*#enses and lsses  Net assets released frm restrictins fr acquisitins f fi*ed assets Increase in unrestricted net assets

© 2011 Pearson Education, Inc. publishing as Prentice Hall

H0$111$111 D61$111 51$111 01$111 011$111 51$111 0$251$111

3$111$111 611$111 021$111 D31$111 361$111 61$111 011$111 0$611$111

E51$111

2$111 H 6$111

22-10

 P22(4

Accunts recei"a.le Unrestricted re"enues > tuitin and fees T recrd tuitin and fees& Tuitin reductin unrestricted>student aid Accunts recei"a.le T recrd tuitin reductins& Cash

0$111$111 0$111$111

301$111 301$111

3$311$111 Unrestricted re"enues > state a##r#riatin Unrestricted re"enues > lcal a##r#riatin T recrd !"ernmental a##r#riatins&

Cash

511$111 D11$111

611$111 Re"enue 7 au*iliar( #eratins T recrd au*iliar( re"enues&

+*#enses 7 au*iliar( #eratins Cash T recrd au*iliar( e*#enses& Cash

611$111

E51$111 E51$111

21$111

Unrestricted re"enues>cntri.utins Tem#raril( restricted re"enues> cntri.utins T recrd cntri.utins recei"ed& Cash

01$111 1$111

D51$111

Unrestricted re"enues>!ifts and !rants Tem#raril( restricted re"enues>Gifts and !rants T recrd !ifts and !rants recei"ed& +*#enses 7 educatinal and !eneral - instructin +*#enses 7 educatinal and !eneral - research +*#enses 7 educatinal and !eneral 7 student ser"ices +*#enses 7 educatinal and !eneral 7 #eratin f #lant +*#enses 7 educatinal and !eneral 7 student aid Cash ,r #a(a.les T recrd educatinal and !eneral e*#enses& Tem#raril( restricted net assets > reclassificatins ut Unrestricted net assets > reclassificatins in T reclassif( tem#raril( restricted assets ,assumes all schlarshi#s and research %ere frm tem#raril( restricted funds&

51$111 D11$111

0$311$111 311$111 301$111 351$111 011$111 0$11$111

D11$111

© 2011 Pearson Education, Inc. publishing as Prentice Hall

D11$111

22-11

/onovern!ental /P 'ollee Statement f Acti"ities fr the (ear 011

 (evenues Tuitin and fees ,net

H3$551$111

State a##r#riatins

3$311$111

Federal !rants and cntracts Pri"ate !rants and !ifts

51$111

+nd%ment incme

01$111

Sales and ser"ices f educatinal de#artments Sales and ser"ices f au*iliar( enter#rises Ttal current re"enues

611$111 HD$651$111

)otal net assets released from

D11$111

restrictions for operations

Ttal re"enues and reclassificatins

H D$551$111

 '"penses +ducatinal and !eneral Instructin   Research

0$311$111 311$111

Student ser"ices

301$111

O#eratin and maintenance f #lant

351$111

Student aid

011$111

Au*iliar( #eratins Ttal #eratin! e*#enses  Net increase in unrestricted net assets

E51$111 D$351$111 11$111

Changes in temporarily restricted net assets&

Federal !rants and cntracts Pri"ate !rants and !ifts +nd%ment incme Net assets released frm restrictins Increase in tem#raril( restricted net assets Chan!e in net assets  Net assets$ .e!innin!  Net assets$ endin!

D11$111 1$111 -D11$111 1$111 1$111 1 H 1$111

assumes all schlarshi#s and research %ere frm tem#raril( restricted funds

© 2011 Pearson Education, Inc. publishing as Prentice Hall

22-12

P22(5 'o!!unit Societ Statement f Acti"ities Fr the ear +nded ?ecem.er D3$ 0133

Chan!es in Unrestricted Net Assets Re"enues and !ains Cntri.utins em.ershi# dues In"estment incme Ttal re"enue and !ains  Net assets released frm restrictins Fr research Fr fi*ed assets Increase in unrestricted net assets +*#enses Pr!ram Ser"ices Research +ducatin Ttal Pr!ram Ser"ices Su##rtin! Ser"ices ana!ement and !eneral Fund raisin! Ttal Su##rtin! Ser"ices Ttal e*#enses  Net increase in unrestricted net assets Chan!es in Tem#raril( Restricted Net Assets Cntri.utins ,HED5$111 L HE06$111 - H34$111 In"estment incme Gain n sale f in"estments  Net assets released frm restrictins ?ecrease in tem#raril( restricted net assets Chan!es in Permanentl( Restricted Net Assets Cntri.utins Increase in #ermanentl( restricted net assets

HD$111$111 E11$111 5D$111 D$E5D$111 H 611$111 D$52$111

E$052$111 $0$111

0$D11$111 D11$111 0$411$111 33$111 00D$111 DE1$111 0$2E1$111 E$5D0$111

5E$111 00$611 6$111 ,E$052$111 ,D$E3E$611

D$111 D$111

Increase in net assets  Net assets$ .e!innin!  Net assets$ endin!

© 2011 Pearson Education, Inc. publishing as Prentice Hall

3$E6E$611 6$E6$111 H4$202$611

22-13

 P22(6 1

Tuitin and fees recei"a.le Re"enues > educatinal and !eneral T recrd tuitin re"enues& +*#enditures > schlarshi#s +*#enditures > .ad de.ts Tuitin and fees recei"a.le All%ance fr uncllecti.le accunts T recrd schlarshi#s and estimated .ad de.ts& Cash

4$111$111 4$111$111

011$111 311$111 011$111 311$111

E$511$111 Tuitin and fees recei"a.le T recrd cllectins f recei"a.les&

2

Cash

E$511$111

511$111 Re"enues > sales and ser"ices f au*iliar( enter#rises T recrd sales f .:stre&

3

4

5

6

7

8

511$111

+*#enditures > educatinal and !eneral +*#enditures > au*iliar( enter#rises Cash T recrd #a(rll&

0$ED1$111 31$111

rt!a!e #a(a.le Cash T recrd mrt!a!e #a(ment&

3$111$111

0$411$111

3$111$111

rt!a!e #a(a.le Interest e*#ense Cash T recrd de.t ser"ice #a(ment&

D41$111 411$111

Cash Tem#raril( restricted re"enues> cntri.utins T recrd restricted !ift&

EE1$111

+*#enditures > instructin Cash T recrd e*#enditures fr #r!ram&

0D$111

Tem#raril( restricted net assets> reclassificatins ut Unrestricted net assets>reclassificatins in T reclassif( re"enues equal t qualif(in! e*#enditures&

0D$111

Tem#raril( restricted net assets> reclassificatins ut Unrestricted net assets>reclassificatins in T reclassif( re"enues equal t qualif(in! e*#enditures&

EE$111

+qui#ment

EE$111

241$111

EE1$111

0D$111

0D$111

EE$111

Cash T recrd equi#ment #urchased&

© 2011 Pearson Education, Inc. publishing as Prentice Hall

EE$111

22-14

P22(7 1

2

Tem#raril( restricted net assets > reclassificatins ut Unrestricted net assets > reclassificatins in T recrd satisfactin f time restrictin&

01$111

Pled!es recei"a.le Cash All%ance fr uncllecti.le #led!es Unrestricted su##rt > cntri.utins T recrd cntri.utins&

46$111 D6$111



3

4

D$061   24$61

T the e*tent that #led!es are nt cllected .( (ear end a time restrictin %ill .e im#lied& An ad;ustin! entr( reducin! unrestricted su##rt and recrdin! tem#raril( restricted su##rt fr the net reali)a.le "alue f the uncllected #led!es %ill .e required&

In"entr( f materials Unrestricted su##rt > dnated materials T recrd dnatins f fd&

361$111

+*#enses > Pr!ram ser"ices In"entr( f materials T recrd e*#enses fr fd used&

363$011

In"entr( f su##lies Cash T recrd #urchases f su##lies&

+*#enses > mana!ement and !eneral +*#enses > Pr!ram ser"ices In"entr( f su##lies Cash T recrd e*#enses incurred&  ,H5$111 L 1$111 L 0$111 7 6$111 accunt increaseJ 5

01$111

Pled!es recei"a.le All%ance fr uncllecti.le #led!es Tem#raril( restricted su##rt > cntri.utins T recrd restricted #led!es&

361$111

363$011

0$111 0$111

31$111 311$111 00$111 55$111

D11$111 36$111 056$111

Solution P22(8 1

Patient accunts recei"a.le Patient ser"ice re"enues>unrestricted T recrd #atient ser"ice char!es at esta.lished rates& Cntractual ad;ustments Patient accunts recei"a.le T recrd cntractual ad;ustments& /ad de.t e*#ense All%ance fr uncllecti.le Patient accunts recei"a.le T esta.lish an all%ance fr uncllecti.le recei"a.les&

310$D11 310$D11

D1$111 D1$111

0$1E4

© 2011 Pearson Education, Inc. publishing as Prentice Hall

0$1E4

22-15

2

Cash

6E$111

Premium Re"enue > unrestricted T recrd #remium re"enue frm ca#itatin a!reements 3

Cash

6E$111

34$111 Other #eratin! re"enue - unrestricted T recrd #harmac( re"enue&

4

5

34$111

 Nursin! ser"ices e*#ense Other #rfessinal ser"ices General ser"ices Fiscal ser"ices Administrati"e ser"ices Cash T recrd salaries and %a!es&

D6$111 33$111 31$111 0$111 01$111

Cash

30$111

5$111

Grant re"enue - restricted T recrd recei#t f restricted !rant funds& 6

Su##lies in"entr( Cash ,r accunts #a(a.le T recrd the #urchase f nursin! su##lies& Su##lies e*#ense Su##lies in"entr( T recrd the use f nursin! su##lies&

30$111

3D$111 3D$111

4$11

© 2011 Pearson Education, Inc. publishing as Prentice Hall

4$11